June 22 (Reuters) – Shares of Torchlight Energy Resources Inc rose more than 15% early on Tuesday, with small-time investors piling into the latest social media-hyped stock trade after the oil and gas producer upsized its share offering to $250 million.
Last week, Torchlight announced plans to raise $100 million and on Monday increased the offering by $150 million after its shares surged 74% in value. The company last week also declared bit.ly/3zVN4Sb a special dividend of preferred stock to be issued to shareholders who held its shares as of market close on June 24.
The company is being acquired by industrial materials maker Metamaterial Inc in a deal that analysts say will likely see its current main business sold or hived off.
The stock, which has risen more than 10 times in value since the start of the year, was trading at $11.18 before the bell on Tuesday, on track to open at a record high.
Torchlight was also the top traded stock before the bell for a second straight day, with more than 4.6 million shares changing hands by 7:30 a.m. ET.
Plano, Texas-based Torchlight traces its roots back to Pole Perfect, incorporated in 2007 in Nevada to develop and market feminine fitness dance studios utilizing the advantages of pole dancing.
In November 2010, Pole Perfect bought Torchlight Energy and abandoned all of its previous business plans within the health and fitness industries before formally changing its name to Torchlight in 2011.
Torchlight, which had a net loss of $2.1 million in the first three months of this year, has warned repeatedly that it had substantial doubt about its ability to continue as a going concern.
The company produced 28 barrels of oil and 711,000 cubic feet of gas with total sales of $2,471 in the quarter to March 30. (Reporting by Arathy S Nair in Bengaluru; Editing by Devika Syamnath)